Verizon Communications said it couldn't agree to a new contract with its workers, resulting in the first strike at the telecommunications giant in 11 years.
The strike began at 12:01 a.m. ET today as union leaders representing 45,000 workers in the Northeast and Mid-Atlantic states decided to call a strike. A majority of the workers are field technicians or work in call centers represented by the Communications Workers of America and the International Brotherhood of Electrical Workers. Verizon Wireless customers are unaffected by the work stoppage.
The strike is a result of a tough position Verizon took in its attempt to extract concessions from its workers. The company is attempting to change the contract terms to allow it to more easily fire workers, tie pay increases to job performance, halt pension accruals this year, and require union workers to contribute to health-plan premiums. The changes are indicative of the pressures the landline business face, with revenue declining amid people switching to wireless and Internet-based phone services.
The stoppage could affect Verizon's customer support, as well as halt the expansion of its FiOS television service. It's an additional wrinkle to deal with as cable competitors could look to capitalize on the strike.
The unions claim Verizon has taken a "Wisconsin-style" hard line and hasn't taken the bargaining process seriously.
"Even at the 11th hour, as contracts were set to expire, Verizon continued to seek to strip away 50 years of collective bargaining gains for middle class workers and their families," the unions said in a statement.
Verizon said it has activated a contingency plan to ensure that customers see limited disruption during the strike. The company said it has trained tens of thousands of management employees, retirees, and others to fill the roles on the union workers.
"We are confident that we have the talent and resources in place to meet the needs and demands of our customers," said Marc Reed, Verizon's executive vice president of human resources.
Verizon Chief Executive Lowell McAdam today issued a letter to its management employees justifying the need for different contract terms.
Verizon's wireline business posted a 0.3 percent decline in revenue in the second quarter, an improvement from the 2.2 percent decline in the first quarter. While its traditional phone business continues to deteriorate, its FiOS service--which offers faster Internet and television services--has been a source of growth.
Verizon has been able to come to terms with its workers during the past two contract negotiations and avoid a strike. In both cases, the talks were extended beyond the contract deadline because of the progress made at the bargaining table. But in this case, both sides were far apart enough that a strike was warranted.
During the last strike in 2000, more than 86,000 workers left their posts for 18 days.
Updated at 7:38 p.m. PT: to include a comment from the unions and a link to a letter posted by Verizon's CEO.